More than a month after President Donald Trump signed an executive memorandum to defer the collection of the payroll taxes that workers pay to help fund Social Security, few companies or people are taking part.
As a result, economic policy experts now say they expect the deferral to have little to no effect on economic growth this year.
No major private employer has stepped forward with plans to forgo withholding the levy from workers' paychecks -- as Trump's action allowed from Sept. 1 through year-end. Costco Wholesale Corp., with 163,000 U.S. employees at latest count, isn't participating, and neither is United Parcel Service Inc. nor FedEx Corp.
Trade groups and tax experts say they know of no large corporations that plan to stop withholding employees' payroll taxes this fall.
The complexity of administering the payroll levy deferral and worries about having to pay back the deferred taxes next year have left companies hesitant. Walmart Inc., Macy's Inc., and Procter & Gamble Co. are among those declining to respond to requests for comment on their plans.
Even the House of Representatives isn't going ahead, concluding that it "would not be in the best interests" of employees. The Senate's still mulling it over. That largely leaves the federal government on its own in proceeding, with its workers.
Trump's August directive delayed the payroll tax due date for the 6.2% Social Security taxes for those making less than $4,000 bi-weekly, which amounts to about $104,000 a year. It was his latest attempt to achieve a second tax reduction after criticism that the 2017 Republican tax overhaul didn't do enough to help middle-class workers.
Lawmakers did endorse a deferral of the portion of payroll taxes that's paid by companies -- not employees -- and it was part of the last stimulus package, approved in March. That measure was easier for employers to administer and acted as a temporary liquidity aid.
Trump had pushed his payroll tax deferral and a tandem executive move on supplemental unemployment insurance benefits to make up for the failure of Congress to pass additional pandemic relief. With lawmakers increasingly unlikely to approve more stimulus aid before the election, the consequences of limited income support are growing more pronounced.
"Employers don't see any benefit to their employees from the payroll tax deferral, and to implement it they would bear significant administrative costs and risks," said Mark Zandi, chief economist at Moody's Analytics. "Without additional fiscal support in the next few weeks, odds that the economy will backslide in the fourth quarter are well over even."
Part of the challenge for the White House is it can't unilaterally cut taxes and can only defer the due date. Internal Revenue Service guidelines left employers on the hook to pay back the payroll levy early next year -- effectively doubling withholding from employees' paychecks.
Particularly for companies with large numbers of low-wage workers where turnover is high, taking up the option of deferral raised the question about how to get money owed from people who had left their employment.
Other challenges include calculating the precise amount of payroll tax to pay back by April, said Pete Isberg, the vice president of government relations at payroll processor ADP Inc.
"If there are underpayments, discrepancies or reconciliation problems, the IRS can assess interest, penalties and additions to tax beginning May 2021 -- for which employers would be liable," Isberg said.
The sole large employer to enforce the plan is the federal government -- and its workers have expressed anger about it. Civilian federal employee unions have urged the White House to allow workers to opt out of the deferral. Military officers have written to members of Congress with concerns that the plan could hurt enlisted women and men who are young and not yet financially savvy.
"Many of these men and women are fresh out of high school and earning the first paychecks of their lives," an Army captain wrote to Rep. Donald S. Beyer Jr., D-Va.. "The sudden influx of money, unexplained, will likely be spent very quickly by many of them, with little regard for later consequences. Many of the soldiers within the ranks live paycheck to paycheck, and if they are not aware that all of this money must be paid back next year, it could be ruinous to their financial health."
Even the federal government needed some time to recalibrate. It said it wouldn't stop withholding the taxes until mid-September, about two weeks after the start date for the deferral period.
A Treasury Department spokesman declined to comment on the take-up of the initiative.
On Twitter Thursday, Trump reiterated his pledge to seek the cancellation of the deferred payroll tax should he win reelection.
He can't do that without the approval of Congress, and he has repeatedly asked lawmakers to cut payroll taxes.
Rep. Kevin Brady of Texas, the top Republican on the Ways and Means Committee, is preparing to introduce legislation to cancel the deferred payroll tax liability. "It would be a shame if employers large and small don't help their workers with this deferral," he said Thursday in a call with reporters. By approving his bill, Brady said, Democrats could "create relief for workers and certainty for businesses."
Republican and Democratic leaders have rejected permanent cuts to the tax because it could compromise the long-term solvency of Social Security retirement benefits.
The temporary deferral means that even if companies embrace the Trump action more broadly, the impact on spending may be limited.
"People are not super sensitive to small changes in their paychecks," said Mattie Duppler, the president of consulting firm Forward Strategies. "But doubling the payroll tax when [the] executive order expires will certainly be noticed by employees."
Information for this article was contributed by Laura Davison and Steve Matthews of Bloomberg News; and by Jim Tankersley of The New York Times.